{"id":404,"date":"2007-09-16T05:55:15","date_gmt":"2007-09-16T05:55:15","guid":{"rendered":"https:\/\/kierjoffe.com\/news\/?p=404"},"modified":"2018-07-19T15:40:17","modified_gmt":"2018-07-19T18:40:17","slug":"icsid-tribunal-finds-argentina-liable-for-damages-under-bit","status":"publish","type":"post","link":"https:\/\/www.kierjoffe.com\/news\/lawyer-argentina-attorney-buenos-aires-law-firm\/icsid-tribunal-finds-argentina-liable-for-damages-under-bit\/","title":{"rendered":"ICSID tribunal finds Argentina liable for damages under BIT"},"content":{"rendered":"<p>In LG&amp;E Energy Corp., LG&amp;E Capital Corp. and LG&amp;E International Inc. v\u00a0<strong>Argentina<\/strong>\u00a0ICSID Case No. ARB\/02\/1 the claimants, three US-based corporate investors, had invested in\u00a0<strong>Argentina<\/strong>\u2019s newly privatised natural gas market in the 1990\u2019s, by purchasing stakes in gas distribution companies.\u00a0<strong>Argentina<\/strong>\u00a0had guaranteed that gas tariffs would be figured in US dollars, adjusted regularly to cover costs, provide a reasonable rate of return, and would not be subject to price controls without compensation. As a result of its financial and economic crisis,\u00a0<strong>Argentina<\/strong>\u00a0passed emergency measures in 2001-2002 that halted tariff adjustments, calculated tariffs in Argentine pesos instead of dollars, and mandated renegotiation of gas distribution licenses under the threat of rescission. The claimants claimed\u00a0<strong>Argentina<\/strong>\u00a0had interfered with their investments in violation of the US-<strong>Argentina<\/strong>\u00a0Bilateral Investment Treaty (BIT).<\/p>\n<p>The three arbitrator tribunal (consisting of Dr Tatiana de Maekelt (Chairman), Judge Francisco Rezek and Prof. Albert Jan van den Berg) found that\u00a0<strong>Argentina<\/strong>&#8216;s acts were not arbitrary under the BIT, nor did they amount to an indirect expropriation. The measures adopted, although severe, did not deprive the investors of the right to enjoy their investment, and did not, therefore, &#8220;effectively neutralise the benefit of property of the foreign owner&#8221;.\u00a0<strong>Argentina<\/strong>\u00a0had, however, breached the fair and equitable treatment standard in the BIT, and its abrogation of certain contractual undertakings gave rise to international liability under the so-called umbrella clause.<\/p>\n<p>However, the tribunal excused\u00a0<strong>Argentina<\/strong>\u00a0from liability for breaches of the BIT for a 17 month period, from the Government announcement that it would freeze funds until the election of President Kirchner, as the country was in a \u201cstate of necessity\u201d. It accepted that the country\u2019s conditions at the time \u201cthreatened\u00a0<strong>Argentina<\/strong>\u2019s essential security interests\u201d and were not merely a period of economic problems as suggested by the claimants. Whilst\u00a0<strong>Argentina<\/strong>\u00a0is exempt from paying damages for this period, it remains liable for damages related to violations of the treaty falling outside that 17 month period. The damages and interest will be determined during the next phase of the arbitration.<\/p>\n<p>There has been some criticism of the tribunal\u2019s finding on the question of &#8220;necessity&#8221; as it failed to consider the contrary findings on the point by the CMS v\u00a0<strong>Argentina<\/strong>\u00a0award. In contrast, in that case, the tribunal rejected\u00a0<strong>Argentina<\/strong>\u2019s &#8220;state of necessity&#8221; defence, holding that the US-<strong>Argentina<\/strong>\u00a0BIT was \u201cclearly designed to protect investments at a time of economic difficulties\u201d and that \u201cthe Argentine crisis was severe but did not result in total economic and social collapse.\u201d<\/p>\n<h1>Consult with a Proven Buenos Aires Argentina Natural Resources Lawyer<\/h1>\n<p>The proven Buenos Aires Argentina natural resources lawyer professionals at Kier Joffe law firm are experienced in the effective resolution of natural resources lawsuits as related to natural resource contracts and acquisitions in Argentina. Buenos Aires natural resources attorney\u00a0professionals are knowledgeable in all areas of general natural resources law, including but not limited to mining rights, flood control issues and land reclamation cases in Buenos Aires Argentina. Clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires natural resources lawyer.<\/p>\n<p><a title=\"Kier Joffe - Attorneys at Law\" href=\"https:\/\/www.kierjoffe.com\/\">www.kierjoffe.com<\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In LG&amp;E Energy Corp., LG&amp;E Capital Corp. and LG&amp;E International Inc. v\u00a0Argentina\u00a0ICSID Case No. ARB\/02\/1 the claimants, three US-based corporate investors, had invested in\u00a0Argentina\u2019s newly privatised natural gas market in the 1990\u2019s, by purchasing stakes in gas distribution companies.\u00a0Argentina\u00a0had guaranteed that gas tariffs would be&hellip;<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[12,30,7,11,8,9,10,90],"class_list":["post-404","post","type-post","status-publish","format-standard","hentry","category-news","tag-argentina","tag-argentine","tag-attorney","tag-buenos-aires","tag-law-firm","tag-law-office","tag-legal","tag-natural-resources"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - 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